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Mayor Emanuel and CPS Announce Funding Plan to Ensure Schools Stay Open Through the End of the School Year

Map Shows Education Funding a Challenge Across the State Under Governor Rauner

FOR IMMEDIATE RELEASE:Friday, May 19, 2017

For more information, contact:CPS Office of CommunicationsPhone: 773-553-1620

CHICAGO – Mayor Rahm Emanuel and Chicago Public Schools (CPS) today announced a plan to secure funding to keep CPS schools open and meet the District’s financial obligations in fiscal year 2017 by borrowing against delayed state funding.

CPS starts every year with a significant disadvantage compared to every other school district in Illinois because CPS receives just 78 cents in state education funding for every dollar other school districts receive on average. The finances for the current fiscal year were made even more challenging due to the Governor’s veto of $215 million in pension funding along with an unprecedented delay by the State of Illinois in $467 million block grant funding.

The plan for the current fiscal year will ensure CPS will remain open through the end of the school year without further budget cuts.

"We are not going to let the hard work and record progress of Chicago students, teachers, principals and families be derailed by failed leadership in Springfield," said Mayor Rahm Emanuel. "The State of Illinois is dead last in education funding, has among the most inequitable school funding formulas in the country, and owes Chicago Public Schools $467 million in payments. While we work with state lawmakers on long-term solutions to Illinois' education funding challenges, in the short-term we are doing what is necessary to keep our students in the classroom and on the path to a brighter future."

In the next few weeks, CPS plans to complete a short-term financing of up to $389 million in Grant Anticipation Notes (GANs). These GANs will be secured by the delayed state block grant payments, which CPS expects to receive in the coming months. Proceeds from the sale of the GANs along with savings achieved from budget reductions made by CPS earlier in the year will be used to make CPS’ 2017 contribution to the Chicago Teachers Pension Fund and ensure CPS schools stay open through June 20. CPS’ Board is expected to vote on this authority at its May 24 meeting.

“Governor Rauner is forcing Chicago’s students to pay the price for his failure to pass a state budget and end the racially discriminatory funding that jeopardizes their futures,” said CPS CEO Forrest Claypool. “Governor Rauner wants CPS to get by on ‘baling wire and chewing gum,’ the words of his representatives, and this plan does exactly that – bridges CPS through the next few months, keeping schools open until June 20, making our pension payment that no other district in the state has to make, and meeting our obligations until we receive more funding later this summer. Until the State of Illinois funds Chicago’s minority students at the same levels as the rest of predominantly white Illinois, our financial challenges will continue.”

This solution addresses the current fiscal year, however, CPS and school districts throughout Illinois face real uncertainty for the next fiscal year given the lack of a state budget that adequately and fairly funds education. More than 400 Illinois districts are waiting on a total of $1.1 billion in delayed state payments with CPS bearing the lion’s share of the delay. These school districts, spread across the state, are also urging the State to pass a budget, to unlock the delayed State payments, and to create certainty for budgeting in the upcoming year.

The attached map shows school districts across Illinois that are facing funding challenges because of the state’s delayed payments, and below are quotes from school superintendents throughout Illinois about the consequences of the State’s inaction under Governor Rauner.

What Other Districts Are Saying About the Consequences of Delayed Payments:

“Illinois’ financial mess is hurting almost every entity in the state, and school districts have felt the pain in their budgets as much as any.

“Transportation and special education reimbursements for mandated services have not been fully paid this year, though in late April, the Illinois comptroller sent out the first quarter's payments for the fiscal year that began July 1. When the Illinois State Board of Education’s annual financial rankings came out in mid-April, some districts pointed right back at the state”

“Meridian's ranking dropped to ‘early warning,’ with a score of 2.8 out of 4. Rankings are based on revenue to fund balance, expenditure to revenue ratio, and days cash on hand.

“‘The way I look at it, of course we'd like to have (a score) somewhere in the 3s, but we've been using some of our reserves because the state has underfunded us,’” Meridian Superintendent Dan Brue said. “‘It's ironic they come out with these rankings when our rankings go down because we're not getting the money from the state like they promised us.’”

“‘If there is no budget in place at the state level, I think districts across the state will struggle opening at all,’ said Tony Sanders, CEO of School District U-46, the state’s second largest district based in northwest suburban Elgin.

The marquees outside his 57 schools on Monday all displayed the same message: Pass Illinois’ budget.

“‘The state currently owes our district $25 million, and that’s for programs such as special education, transportation and bilingual education,’ Sanders said.

“In a hashtag campaign using #PassILBudget, superintendents around the state chimed in.”
Right now, Illinois owes Beach Park School District $1,432,900.39!’ wrote Nancy Wagner, superintendent of Beach Park School District 3 in Lake County, on Twitter on Monday.”

“As of the writing of this letter, the state of Illinois is in a perpetual condition of extreme financial dysfunction. This is characterized by the lack of a budget, possibly for a third year, that adequately and equitably funds public education. Meanwhile, school districts are owed hundreds of millions of dollars in mandated categorical payments.

“As of April 24, a statewide, grassroots effort on behalf of over 400 superintendents in the state, representing the majority of students in Illinois, has erupted and spread, helped not only by social media but by the outrage we all feel with the current state of affairs in Illinois.
“In addition to the extreme need to pass a budget, which is now overdue for fiscal year 2017 by approximately 11 months (the fiscal year 2016 budget was memorably passed on June 30, 2016), Illinoisans must be aware that the state is not fully funding public education this year, as has been stated by some state officials.

“In fact, public school districts are owed millions in late payments related to mandated categorical grants, which support transportation and special education. While districts finally received long overdue and partial payments on April 25, this problem is far from over until we are paid what we are owed so we can properly serve our students. It is imperative that all of those payments be released immediately and not continue to be embroiled in the toxic political environment in Springfield, which continues to hold the citizens of Illinois hostage.”

“The Freeport School District is just one of the hundreds of school districts statewide that have not received full funding from the state of Illinois. I, along with 400 other school district superintendents, am calling for an end to the state’s historic budget impasse, changes in the way the state funds schools, and payments on bills that are past due. Without a budget, a new educational funding formula won’t happen and the missed payments will not come in.

“The Freeport School District has received all of the general state aid money from the state, to this point, but has only received one mandated categorical payment. The missing mandated payments help pay for transportation, special education, bilingual programs and other state mandates. So far this school year, the Freeport School District has not received $1,046,868 from the State of Illinois. The district will be out close to $1.5 million if no more payments are made this school year.

“This is not OK. The state tells us we are going to receive these payments, but then suddenly pulls them away from the districts. There is no way to create a fiscally responsible budget when you do not know the amount you will be receiving.”

“Early childhood education services in Williamson County’s five school districts may not be available next year unless the state releases all or most of the funds owed to the program in short order, according to Sheila James, program coordinator for the Williamson County Early Childhood Cooperative.

“If the state has not released funds owed to the cooperative by Aug. 1, Pre-K will not begin in the fall, James said.

“‘This action has never been taken before,’” James said.

“The cooperative provides pre-kindergarten classes and services to teen parents and their children in the county’s five school districts: Johnston City Unit District 1; Marion Unit District 2; Crab Orchard Unit District 3; Herrin Unit District 4; and Carterville Unit District 5.

“The fiscal year 2017 budget for K-12 schools allocated $2.5 million to the Williamson County cooperative for early childhood education services, of which only $904,000 has been paid. That means the state still owes the organization $1.6 million for the fiscal year that ends June 30 — and the state is currently about seven months behind on making payments.

“‘We serve the most at-risk children in Williamson County,’ James said. Early childhood education and intervention is widely regarded as one of the most effective tools in preparing students for success who come from challenging backgrounds. With poverty rates so high throughout Williamson County and the region, the need for these types of services is invaluable to the future success of the students and schools, she said.”

“Elgin Area School District U-46 CEO Tony Sanders says a two-year budget standoff between Gov. Bruce Rauner and the legislature threatens U-46's ability to open for a new school year in August.

“Even though the state approved stopgap aid to schools, it's months behind on payments for services like transportation, bilingual and special education. U-46 is owed $20 million. West Aurora is owed $10 million.”

Quad Cities Online Op-Ed: Views from QCA: Students, schools suffer state’s inaction
“Locally, the state owes our four districts more than $8 million. It has been shared that the state will not make but one-quarter of those payments this year. As schools already are struggling with sufficient resources, this puts a strain on our ability to pay our staff and vendors.”

Sampling of letters and press releases from districts around the State:

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